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Perspective: Why NBC’s ‘revealed’ Netflix ratings are irrelevant

Last week, NBC called for “perspective” when it comes to the rise of Netflix and other SVOD services versus traditional television, citing research that claimed to reveal Netflix’s viewing figures. The streaming giant is, of course, famous for not revealing its ratings, so the data makes for interesting consideration.

It comes from Symphony Advanced Media, based in San Francisco, which analysed and tracked viewing through audio content recognition technology – software that’s loaded on a user’s phone and captures the soundtrack of each programme being watched.

The research focused on viewers aged between 18 and 49 using a 35-day cycle and found that Jessica Jones reached an average of 4.8 million viewers each episode. Aziz Ansari’s Master of None attracted 3.9 million, while Narcos drew 3.2 million during the same window. Both rated higher than rival Amazon’s The Man in the High Castle, the site’s most-watched show, which averaged 2.1 million.

All of them are significantly higher than Orange Is the New Black, which had an average of 644,000 viewers in the final four months of 2015, despite being Netflix’s most popular original series. Orange Is the New Black, though, released its most recent season way back in June. Indeed, the study highlights the temporary nature of each titles’ buzz, with activity spiking in the first two weeks after a show’s launch.

Measuring the percentage of viewing time that Netflix subscribers spent streaming its series, Symphony found that users spent around 25 per cent of their watching time tuned into OITNB following its launch, with the share of linear TV viewing then returning to the typical levels of 91 per cent to 97 per cent. A similar pattern emerged with Narcos and Master of None, with their share of viewing time reaching 17 per cent and 11 per cent respectively in each show’s first fortnight.

Alan Wurtzel, NBCU president of research and media development, did concede that live viewing is declining, with its share of viewing dropping to 51 per cent, down from 81 per cent in 2008. Younger viewers, he added, tend to watch shows later in the 35-day cycle through catch-up and time-shift technology.

Netflix later dismissed the figures at the winter press tour for the Television Critics Association, with Ted Sarandos, Netflix’s chief content officer, joking: “Why would NBC use their lunch slot with you to talk about our ratings? Maybe because it’s more fun than talking about NBC ratings!”

The tit for tat exchange aside, though, Netflix’s dismissal of the data highlights just how different their approaches are.

TV ratings have increasingly been plagued by calls of inaccuracy in an ever-changing media landscape, with current measurements not able to take into account VOD behaviour. The sample for Symphony’s research, though, was only 15,000 people, opening it up to similar calls of inaccuracy, due to its size. But even if the figures are accurate, they’re irrelevant.

Netflix, in short, is not a company concerned about its share of 18 to 49 viewers: it is concerned about its overall number of subscribers. For NBC, measuring demographics is important to advertising income. For Netflix, advertising is simply not a consideration.

“The methodology and the measurement and the data itself doesn’t reflect any sense of reality of anything that we keep track of,” Sarandos commented, adding the 18-49 measurement is ” so insignificant to us that I can’t even tell you how many 18-49 year old members we have”.

Instead, the streaming giant is concerned with one thing: reach. Earlier this month, it launched in 130 new markets simultaneously, expanding its reach to almost every country in the world.

For Netflix, more potential subscribers means more income. Its original content is as much about attracting and retaining subscribers as it is getting them to sit in front of the TV: it doesn’t matter if they watch Netflix all the time, or some of the time, as long as they don’t cancel their monthly payment.

It’s telling that Sarandos gave one official comment about viewing figures: “Somewhere in the world, every second of every day, someone is pushing play to start a Netflix original show.”

As for the lack of exact numbers, he did note that “once we give a number for a show, then every number will be benchmarked off of that show”. For Netflix, though, some shows are “built for 2 million people” and others are built for 30 million.

“[Revealing ratings] puts a lot of creative pressure on the talent that we don’t want to,” he said.

Indeed, the site’s reach is also expanding in another way: shows are becoming more international, from original French drama Marseille to resurrected Canadian show Degrassi, and more diverse, as Netflix seeks to engage different demographics. While Netflix initially began as a prestige brand, with drama such as House of Cards, it is now commissioning Adam Sandler films and bringing back old 1980s sitcoms, such as Full House. Netflix can afford to vary how highbrow (or lowbrow) its original series are, as long it gets people signing up.

This year, the company will spend $6 billion on content, Sarandos announced, including original production and third party acquisitions, with more than 600 hours of new content lined up. Eventually, Netflix will be launching a new original title every week – that spike that NBC worries about could become a norm.

Does that mean Netflix’s rise will steal customers away from traditional TV? No.

“There is not an apples to apples comparison to Netflix watching and any reported Nielsen rating,” said Sarandos.

But it does mean that NBC’s advertiser numbers in crucial demographics could be affected. That younger segment of viewers who catch up with a programme later in its cycle may well drop off. And, of course, it may not. That uncertainty is what has normal TV companies seeking “perspective” in the US: Netflix doesn’t fit into the existing system. It’s not a threat in the traditional sense, however you measure it. It’s something new. And that’s a pretty scary perspective.

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